Non-farm payroll: Weak US jobs growth pushes back rate hike expectations

Jessica Morris
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The Fed held off a rate hike in September (Source: Getty)

Lacklustre US jobs growth has stoked concerns over the strength of the US economy and could push back expectations for a widely-anticipated rate hike.

The Bureau of Labour Statistics said that the US economy added 142,000 jobs last month, below economists' estimates for 201,000. The August reading was also revised sharply downwards from 170,000 to 135,000.

Average hourly wages posted no change, missing economists' forecasts for 0.2 per cent growth.

The dollar dived against the pound, while US and European stock markets both slumped on the data. Meanwhile, safe-haven metals such as gold jumped on the news.

Read more: Why the Fed should stick to its guns

While Federal Reserve chair Janet Yellen recently reiterated that the Fed was likely to raise short-term interest rates this year, but today's employment data could push it back to 2016.

Two weeks ago the Fed held fire on raising short-term interest rates for the first time in six years, citing choppy stock markets as well as the possibility of a faltering global economy.

"Today’s worse than expected nonfarm payroll figure has almost totally justified Janet Yellen’s recent caution by not raising rates at last month’s Fed meeting and puts the chances of a 2015 rate hike from the Federal Reserve into serious doubt," Angus Campbell, senior analyst at FXPro, said.

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